Oil Market Weekly Outlook
Oil prices rose modestly in Asian trading on Friday, with Brent crude futures for September delivery up 0.8% to $84.88 per barrel and West Texas Intermediate (WTI) futures up 0.9% to $79.62 per barrel. Both benchmarks are on track for weekly gains exceeding 11% after the latest escalation in U.S.–Iran hostilities added a substantial geopolitical risk premium.
The U.S. military reported a sixth consecutive night of strikes on Iran on Thursday, aimed at degrading Iranian military capabilities. Tehran has repeatedly threatened to disrupt shipping through the Strait of Hormuz, a chokepoint through which roughly one‑fifth of global oil and fuel supplies transit. Vessel traffic through the strait fell sharply this week following the re‑imposition of a U.S. naval blockade on Iranian ports.
U.S. inventory data released this week showed a larger‑than‑expected draw. The Energy Information Administration (EIA) said crude oil stockpiles fell by 1.7 million barrels in the week ended 10 July, leaving 409.7 million barrels on hand, while gasoline inventories declined by 1.5 million barrels. The American Petroleum Institute (API) reported a draw of about 564,000 barrels of crude for the same period, a smaller decline than analysts had forecast.
Despite the supply‑risk backdrop, the market has not produced another explosive rally; a 10% surge on Monday was tempered by profit‑taking as traders weigh the possibility of prolonged disruptions against the potential for producers to offset any shortfall. Regional mediators, including Qatar, Egypt and Pakistan, continue diplomatic talks even after the collapse of an earlier cease‑fire.
Overall, the combination of heightened geopolitical tension, a tightening U.S. crude market, and reduced shipping through the Hormuz corridor is supporting a sharp weekly upward trajectory for oil prices.